Wednesday, 20 July 2016

FCRA Update

Ministry of Home Affairs has
issued a notice dated July 18, 2016 requesting all organisations with
FCRA registration to update their FCRA bank account details (both
designated bank account and utilization bank accounts) in Form FC-6
latest by 31st August,
2016.

If there is no change in your
designated bank account or utilization account you need not do
anything.

However, to double check log into
https://fcraonline.nic.in
click the tab for Form FC 6 and see if the details appearing on the
MHA website are accurate and complete both in terms of the designated
and utilization account/s. If not, click the yes button and make the
change on or before 31st
August 2016.

Several organisations may not have
changed their designated FCRA Bank account but may have opened or
closed ‘utilization accounts’. This requires to be updated.

Transfer of funds is allowed from
the designated FC account to multiple account or accounts opened for
its utilization.

However, no funds other than the
amount received in the designated FC account shall be received or
deposited in such multiple account or accounts.

Inter-account transfer of funds
between the multiple accounts is not permissible.

Thus, if NGO XYZ has FCRA Bank
Account No. 1234 and wishes to have a 'Project Utilization Account'
for the funds sent by ABC Foundation (USA) it would be allowed.

The amount must first be received
in your FCRA Bank account No. 1234 and then the entire amount
received from ABC Foundation (USA) can be moved to 'XYZ (FCRA) –
ABC Foundation Project Utilization Account'. No other funds should be
added to this account other than from ABC Foundation and when the
project is closed the remaining balance must be put back in FCRA Bank
Account No. 1234.

One can have several FCRA
Utilization accounts however any change regarding the designated or
utilization account must be intimated to MHA by filing Form FC 6.

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Since its founding in 1986, the Centre for Advancement of Philanthropy (CAP) has helped philanthropic organisations comply with the complex web of legal issues governing charitable giving in India. CAP specializes in all legal matters concerning the Trusts/Societies Act, Income Tax Act, FCRA, Legal Aspects of CSR and a host of allied laws and good management & compliance practices.